facebookAs a student with little cash at hand, how should I begin my investment journey? I've read a lot of personal finance articles so I am familiar with terms like ETFs, Index Funds, bonds etc.? - Seedly



12 Jan 2021


General Investing

As a student with little cash at hand, how should I begin my investment journey? I've read a lot of personal finance articles so I am familiar with terms like ETFs, Index Funds, bonds etc.?

Discussion (31)

What are your thoughts?

Bjorn Ng

Bjorn Ng

20 Dec 2019

Level 13ยทBusiness Analyst at 10x Capital

Hey there! Well, honestly it takes time, it's great that you are building up your investing knowledge, keep it up! As a start, you can consider POSB Invest Saver Regular Savings Plan, where they will buy in to STI ETF/ABF Bonds every month based on the amount you allocated. Then, maximize your bank account through DBS Multiplier, UOB One, SC Jumpstart etc.. That's another way to let your money grow. And last, see how you can further gain more cash - for me I gave tuition in addition to my full time job. I too had little cash in the beginning so I have to work hard to generate more to invest.

There is no need to rush into investment. If I think about the major lessons I learned (and unlearned) since I graduated and worked

1) the major driver of wealth accumulation is actually your savings rate (ie proportion of income not spent). Not even income level (there is no savings if you spend all your income, even if you make and spend a million a year).

2) second best friend is probably time and the power of compounding (and compounding can be very very slow).

3) managing your emotions and learn investing properly. I have to say that everything people tell me, what the school / textbooks taught me (about buy low sell high, do trading and see things flip a few times your cost) was mostly wrong... At least to my current way of investing. I actually took the whole of 2018 to unlearn everything and think through the real way of investing.

4) if you have to start learn, start with compounding, understand how to calculate yield, and I personally recommend how to interpret the fees and costs involved in each of the investment types.

There is still a lot to be said, but

A) you said you have little cash. So your priority should be focusing to learn how to save and determine the right amount of cash to set aside for investing. The way I see it, you can start learning, but you have no capital to begin with.

B) don't borrow to invest, margin or whatever. You don't have cash means you don't invest. Don't dig yourself into a debt trap by trying to follow what other people are doing.

C) download stocks cafe, setup an account, and pretend you bought 1000 shares of tesla, dbs, and SPY.

Input the price based on the day you start the account. Look at the returns of your virtual portfolio say twice a week. Can you explain to yourself whether you are doing well / bad?

After 2 months, pretend and input 1000 shares again for tesla / dbs / SPY again.

Can you explain to yourself why this virtual portfolio p&l is red or green? Keep doing this for at least six months.

If you can't explain why this virtual portfolio is making or losing money, you are better off sticking with etf / index funds etc that have the lowest cost.

take the time to learn your emotions as well, putting tesla in there should give you roller-coaster. If you can't handle the stress of seeing a huge red or green number, then you know you can't.

Play it virtual and lose fake money first before you try to start and lose real money.

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Might want to learn how to do in depth research on individual company since you got the interest i b...

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